 2012-09-27 |
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YC Group (4306) announced yesterday (26th) that it is moving forward with its upstream raw material integration plan by investing in ACHEM. ACHEM will produce 80,000 tons of acrylic acid, 80,000 tons of butyl acrylate, and 20,000 tons of maleic anhydride, with production expected to begin by the end of 2013. According to estimates, this new production capacity could contribute approximately NT$5 billion in revenue in the first year based on current market prices.
Yesterday, Mega International Commercial Bank held a signing ceremony for a $100 million (approximately NT$3 billion) syndicated credit facility arranged for ACHEM, with YC Group’s Chairman Li Chih-Hsien and Mega International Commercial Bank’s General Manager Hsu Guang-Hsi jointly hosting the event. The company's stock price closed at NT$23.30, down by NT$0.15.
In recent years, YC Group has been expanding its investment in major projects in Taiwan and China to integrate its upstream industry chain and broaden its business scope. In 2011, YC formally entered the upstream plastics sector by investing in ACHEM (Jiangsu) Co., Ltd. This is the first time the company has publicly disclosed the specific products to be produced by ACHEM.
YC stated that this investment is the largest single project since the group's establishment. The project is planned to be implemented in two phases, with the first phase of construction having started in July 2012 and expected to be completed and operational by the fourth quarter of 2013. The second phase will be determined based on market conditions.
In the future, the acrylic acid and ester products produced by ACHEM will be used internally within the YC Group and also sold to other manufacturers, with plans to gradually expand into overseas markets. The syndicated loan will provide ACHEM with the necessary funds for its operational development.
According to estimates, based on current market prices, this new capacity could contribute approximately NT$5 billion in annual revenue. Additionally, YC’s board has approved a fundraising plan of NT$1 billion, including convertible bonds and cash capital increase, to secure operating capital and improve its financial structure. This plan is expected to inject growth momentum into its aggressive expansion projects. |
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